When Marc Andreessen wrote “Software is eating the World” 10 years ago [in 2011], ‘the world’ usually refers to ‘all industries’ (which is true). But it turns out it’s also true in the geographic sense, and Latin America is no exception.
Latin America’s Digital Transformation is well underway. For specific examples, just look at Mexico today and how different it is vs. only 10 years ago where new digital entrants (many of which didn’t even exist) changed the rules of the game: think of the difference in price, selection, convenience, speed of Amazon and Mercado Libre vs. Liverpool, Uber vs. Taxis, Netflix vs. Televisa, Twitter and Facebook vs. newspapers, WhatsApp vs. SMS and phone companies, and so on. Can you imagine going back to that old world? I can’t. And it doesn’t stop there: 10 years ago there was no Conekta, Konfio, Kueski, Clip, Albo, Arcus, all of them companies solving real problems, plus many others that we haven’t heard of.
More interestingly, this Digital Transformation will only keep on accelerating. There is now a critical mass of digital and entrepreneurial infrastructure that has created a tipping point. Again, think of today vs. 10 years ago: everyone now has a smartphone, there are now several (online and offline) payment options, people now spend more time on digital than traditional media, entrepreneurs can access local and foreign VC funds – none of this was really available 10 years ago.
This is to say: A lot has been done, but there’s even more to come. Even better, we can see what’s coming. The US and the UK have traditionally been several years ahead of emerging markets, but Asia has been catching up quickly (and in some cases is ahead, like China with digital payments). Latin America has usually been a few years behind, but at every step, we could always see what would happen next with increased internet penetration (e-commerce, digital media, digital payments, smartphone adoption, and son on). So what comes next (which is another way of saying, ‘what problems haven’t been solved’)? Better, cheaper, and more accessible access to financial services, education, healthcare, day to day purchases, more transparent media – in short, many of the things that are taken for granted in developed economies.
Most of the stories in the local and international press focus on infrastructure, energy, and manufacturing, but underneath the surface there are entire industries being remade thanks to technology, and it has been improving the lives of millions of people. Most people reading this initially are probably friends from the technology/startup/venture capital world, and will think to themselves: ‘We already know this’. But this is the irony: in certain circles (and for sure the millions of people using digital services every day), everybody knows this, but among mainstream media/traditional investors/government bodies/many international investors and global capital markets, this is not the story that’s being told.
I would even go one step further and argue that the fact that we’re not there yet is actually a good thing: this is the time to invest [‘Buy low’] before everyone else rushes in. Just like 10 years ago Software was eating the world, now Software is eating Latin America: Entire industries are being digitally remade, and this offers the greatest opportunity for growth. So remember: The real growth story in Latin America is Digital Growth.